Section 5: Budgeted financial statements
A brief analysis of the Royal Australian Mint’s (the Mint) budgeted financial statements is provided below. The budgeted financial statements will form the basis of the financial statements that will appear in the 2007-08 Annual Report.
5.1 Analysis of budgeted financial statements
In the income statement the Mint has budgeted for a profit of $1.0 million in 2007-08. Income from the sales of numismatic coin and like product is expected to remain steady in the forward years.
The balance sheet provides a consistent picture between the budget and previous financial years. The net asset position is expected to increase from previous financial years due to the replacement of old plant and equipment, for which the Mint received capital appropriation over five years from 2003-04.
Budgeted financial statements
Departmental financial statements
The Mint has a sound financial position and currently has sufficient cash to fund ongoing provisions and payables, and asset replacements, as they fall due.
Budgeted departmental income statement
This statement provides a picture of the expected financial results for the Mint by identifying full accrual expenses and revenues, which indicates the sustainability of the Mint’s finances.
Budgeted departmental balance sheet
This statement shows the financial position of the Mint. It helps decision-makers to track the management of assets and liabilities.
Budgeted departmental statement of cash flows
Budgeted cash flows, as reflected in the statement of cash flows, provide important information on the extent and nature of cash flows by categorising them into expected cash flows from operating activities, investing activities and financing activities
Departmental statement of changes in equity — summary of movement
Shows the budgeted movement in equity, from the operating result, changes in revaluations and injections of equity from capital appropriations.
Departmental capital budget statement
Shows all planned departmental capital expenditure, whether funded through capital appropriations for additional equity, or funded from internal sources.
Departmental property, plant, equipment and intangibles — summary of movement
Shows budgeted acquisitions and disposals of non financial assets during the Budget year.
Schedule of administered activity
Schedule of budgeted income and expenses administered on behalf of government
This schedule identifies the main revenues and expenses administered on behalf of the Australian Government.
Schedule of budgeted administered cash flows
This schedule identifies the cash flows administered on behalf of the Australian Government.
5.2 Budgeted financial statements tables
Table 5.1: Budgeted departmental income statement
(for the period ended 30 June)
Table 5.2: Budgeted departmental balance sheet (as at 30 June)
Table 5.3: Budgeted departmental statement of cash flows
(for the period ended 30 June)
Table 5.4: Departmental statement of changes in equity — summary of movement
(Budget year 2007-08)
Table 5.5: Departmental capital budget statement
Table 5.6: Departmental property, plant, equipment and intangibles — summary of movement (Budget year 2007-08)
Table 5.7: Schedule of budgeted income and expenses administered on behalf
of government (for the period ended 30 June)
Table 5.8: Schedule of budgeted assets and liabilities administered on behalf
of government (as at 30 June)
The Mint does not have any administered assets and liabilities.
Table 5.9: Schedule of budgeted administered cash flows
(for the period ended 30 June)
Table 5.10: Schedule of administered capital budget
The Mint does not have any administered capital.
Table 5.11: Schedule of administered property, plant, equipment and intangibles — summary of movement
(Budget Year 2007-08)
The Mint does not have any administered property, plant, equipment or intangibles.
5.3 Notes to the financial statements
Departmental
Basis of accounting
The Mint’s budgeted statements have been prepared on an accrual basis and in accordance with historical cost convention, except for certain assets which are at valuation.
Revenues and expenses are recognised in the operating statement when and only when the flow or consumption or loss of economic benefits has occurred and can be reliably measured.
Budgeted departmental income statement
Revenues
Revenue is derived from the sale of numismatic coin, the production of circulating coin and the sale of coin like products. The amount of revenue earned in any one year is dependent upon the demand for such products by the coin collecting market.
Expenses
Employees
This includes wages and salaries, superannuation, provision for annual leave and long service leave and workers compensation.
Depreciation and amortisation
Depreciable assets are written off over their estimated useful lives. Depreciation is calculated using the straight-line method.
Other
Other expenses include the cost of goods sold.
Budgeted departmental balance sheet
Non-financial assets
Inventory
Inventories held for resale are at the lower of cost and net realisable value. Work in progress and finished goods are brought to account to include direct costs and a proportion of direct labour and overhead. All precious metals are purchased and brought to account at cost and expensed as used.
Provisions and payables
Employees
The liability for employee entitlements includes provision for annual leave and long service leave. No provision has been made for sick leave, as all sick leave is non-vesting.
The non-current portion of the liability for long service leave is recognised and measured at the present value of the estimated future cash flows in respect of all employees.
Asset valuation
Australian Government agencies are required to value property, plant and equipment and other infrastructure assets using the fair value method of valuation.
Departmental capital budget statement
This shows proposed capital expenditure for the ongoing replacement programme of non-financial assets. This asset replacement programme has been funded by capital appropriation. In 2007-08 $2.5 million will be provided for the replacement of plant and equipment, $6.1 million for the refurbishment of the Mint and $6.5 million for internal security and upgrade of associated systems.
Administered items
Seigniorage is collected by the Mint on behalf of the Australian Government. Seigniorage represents the difference between the face value of coinage sold to the Reserve Bank of Australia and its cost of production to the Mint. Seigniorage is treated as an administered item within the Mint’s administered budget statements.